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I was interested in the S5 as well, but the wait time is quite long right now. You'll likely wait, and you'll get an 09, not an 08. The S5 is more in the GT genre, while the M3 is slanted a bit more towards the performance side of the spectrum.
The S5 gets you AWD, a nice Bang and Olufsen sound system, etc. The glass panel roof can only tilt up, no sliding action. And, as you noticed, the nice LED DRL's
as nice as the S5 is, there are some things that shouldnt be. for instance the tilt only sunroof, the terrible sound system from B&O, and the not so hot performance for a 350hp V8.